What Is The Ownership Structure Like For China Tian Lun Gas Holdings Limited (HKG:1600)?

By
Simply Wall St
Published
June 02, 2021
SEHK:1600
Source: Shutterstock

A look at the shareholders of China Tian Lun Gas Holdings Limited (HKG:1600) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

China Tian Lun Gas Holdings has a market capitalization of HK$8.3b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions don't own many shares in the company. Let's delve deeper into each type of owner, to discover more about China Tian Lun Gas Holdings.

Check out our latest analysis for China Tian Lun Gas Holdings

ownership-breakdown
SEHK:1600 Ownership Breakdown June 2nd 2021

What Does The Institutional Ownership Tell Us About China Tian Lun Gas Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Institutions have a very small stake in China Tian Lun Gas Holdings. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
SEHK:1600 Earnings and Revenue Growth June 2nd 2021

We note that hedge funds don't have a meaningful investment in China Tian Lun Gas Holdings. Looking at our data, we can see that the largest shareholder is Gold Shine Development Limited with 47% of shares outstanding. For context, the second largest shareholder holds about 6.9% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder. Yingcen Zhang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Additionally, the company's CEO Zhenyuan Xian directly holds 0.9% of the total shares outstanding.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of China Tian Lun Gas Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of China Tian Lun Gas Holdings Limited. Insiders own HK$1.2b worth of shares in the HK$8.3b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 33% ownership, the general public have some degree of sway over China Tian Lun Gas Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 48%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China Tian Lun Gas Holdings better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with China Tian Lun Gas Holdings , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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